Sales Taxes Bill

[Rick Wilson]

Re: Sales Taxes Bill

If you collect the sales tax but don't reach the $1M, do you have to contact each customer and send them a refund?

I highly doubt it, I suspect you'd still owe the taxes.

[wajake41]

Re: Sales Taxes Bill

The bill the Senate passed can be read here:
http://www.govtrack.us/congress/bills/113/s743/text

[wajake41]

Re: Sales Taxes Bill

It's essentially the Walmart kill competition bill.

[nottheusual1]

Re: Sales Taxes Bill

If you collect the sales tax but don't reach the $1M, do you have to contact each customer and send them a refund?

You are required to collect taxes if **your prior year's sales are over $1mm.**

At that point, you'd be required to remit to whatever authority/service ends up as the "clearing houses" for all this on a monthly/quarterly basis, so the current year's sales really don't matter - you'll be paying in what you collect pretty close to when you collected it and whether or not you collect next year is based on this year.

[UltimateNourishment]

Re: Sales Taxes Bill

Thanks Rick for your reply and for everyone's input and POV.

Just so I can wrap my head around this, as I am sure others in my store's position who may be reading and wondering, if this sales tax law passes, how does a store calculate sales tax with different % for each and every countless jurisdiction? When my store was located in Arizona, we had AZ tax and just calculating sales tax for 1 state was time consuming. How can a store such as mine simplify the process should it pass?

Anyone know?

Again all replies are appreciated and may aid to relieve the panic starting to set in :-(

[nottheusual1]

Re: Sales Taxes Bill

Julie Hunter ::

They will adopt this method for deciding how sales taxes are collected:

http://www.streamlinedsalestax.org/

The idea is the online retailer meeting the prior year sales volume requirements uses a service to determine in real time (like a module) how much tax is collected and for who. Then, you'd send that money to some central collection authority (maybe even the service you use to determine the taxes) and they will disburse it based upon your collection records.

[Rick Wilson]

Re: Sales Taxes Bill

Just so I can wrap my head around this, as I am sure others in my store's position who may be reading and wondering, if this sales tax law passes, how does a store calculate sales tax with different % for each and every countless jurisdiction? When my store was located in Arizona, we had AZ tax and just calculating sales tax for 1 state was time consuming. How can a store such as mine simplify the process should it pass?

You'd end up using a Service for Sales Tax (a la a Payment Gateway) think of it as a Sales Tax Gateway. Instead of you configuring each one by hand (although you could do that by Zip Code if you were so inclined) you would connect to their service via a module.

When someone went to checkout, it would contact their service in real time, their service would calculate the correct sales tax based on their address and then send it back to your store. All within about 2 seconds.

These services can run from free to a few hundred dollars per month and most of them do more things behind the scenes like allow you to file in every state that collects Sales Tax via their system.

The main companies who do this for Miva today:

1. Avalara (usually an Enterprise solution for bigger customers)
2. Accurate Tax (more small business friendly but less Enterprise bells and whistles)
3. Tax Cloud (currently free and paid for by the States)

[Renaissance]

Re: Sales Taxes Bill

Hi Julie,

If this passes, I don't think it will be worth doing in house compliance for most businesses. I spoke with Avalara following a recent webinar and came away with the impression that the cost will not be as steep as I would have expected. They ( and similar companies) can stay up to date on jurisdictions, laws, rates, filing requirements and other compliance issues more efficiently than individual businesses can.

[UltimateNourishment]

Re: Sales Taxes Bill

Thank you! Okay, doable.... if it happens... I appreciate you explaining how it can be simplified.

[wcw]

Re: Sales Taxes Bill

It seems to me there will need to be some sort of identifier in each product record as to the type of product it is for tax purposes. Then every product will have to be updated to reflect this type. So AZ might charge for software delivered over the internet (even with no CD, etc), whereas FL may not. CA might charge for clothes for school age kids, while FL may do it except between Aug 15-Aug 21. Hence, perhaps the product record might have several types of clothing, i.e. school age clothing, work clothing, uniforms, etc. It is quite easy for a brick and mortar store to sort this out with their local jurisdiction. But if this has to be done for 10,000 jurisdictions, how is that "fair tax"? So I'm thinking the tax field will need to change from a T/F to one that takes a numeric or alphanumeric code. Let's hope sanity prevails.

[nottheusual1]

Re: Sales Taxes Bill

Let's hope sanity prevails.

It'll be interesting - they don't even agree on what non-product charges are taxable:

http://www.streamlinedsalestax.org/i...lity-matricies

[Rick Wilson]

Re: Sales Taxes Bill

Let's hope sanity prevails.

I love that part of you is still an Optimist after all these years Bill

[wcw]

Re: Sales Taxes Bill

Like the news from Ohio this morning, all things are possible. Never give up hope.

[nottheusual1]

Re: Sales Taxes Bill

Yeah - it's nice when we're in the news and it isn't Dahmer-esque. But my hope meter flags when I see who's taking the next look at the legislation:

http://judiciary.house.gov/about/members.html

[Bruce - PhosphorMedia]

Re: Sales Taxes Bill

. Let's hope sanity prevails.

Ah, Bill, you do realize that its up to Congress now...so hoping for sanity is probably an insane proposition<g>.